Tuesday Marked by U.S.-Sino Data Releases and a Restrictive Australian Budget

May 13, 2014

China released retail sales, industrial production and business investment. Japanese money growth slowed to a 12-month low.

U.S. retail sales, import prices, small business sentiment, business inventories, and weekly chain store sales will be reported later in the day.

It’s budget day in Australia, and markets are braced for a big dose of austerity there to correct excessive deficit spending. In the meantime, weaker housing data in that economy were reported, further alleviating any concern about near-term tightening of monetary policy.

The ZEW Economic Institute released mixed results gleaned from its May survey of German and euro area investor sentiment.

Same-store sales in Britain were strong in April.

EUR/USD is unchanged from Monday’s close. The dollar otherwise shows narrowly mixed movements: drops of 0.2% versus the kiwi and 0.1% against the Swiss franc and yuan but upticks of 0.2% relative to the Australian and Canadian dollars and 0.1% vis-a-vis the yen and sterling.

Share prices in the Pacific Rim advanced 1.5% in India, 2.0% in Japan, 0.9% in Australia and South Korea, 0.7% in New Zealand, and 0.4% in Hong Kong. Equities in Europe have risen 0.5% in Germany but fallen 0.7% in Italy.

Ten-year German bund, British gilt and Japanese JGB yields are unchanged.

Gold has slipped by 0.2% to $1,293.10 per ounce. West Texas Intermediate oil is 0.2% firmer at $100.79 per barrel.

Chinese on-year industrial production growth of 8.7% in April was again slightly shy of expectations and matched the first-quarter pace.

Chinese retail sales grew 11.9% in the year to April, down from 12.2% in March and 13.6% in December.

Chinese fixed asset business investment growth slowed further in April. The January-April on-year increase of 17.3% was down from a first-quarter gain of 17.8% and full-2013-over-2012 increase of 19.6%.

Japanese M2 money grew just 3.4% in the year to April, down from 4.0% in 1Q14 and 3.6% in calendar 2013. The April-on-April advance was the slowest in 12 months.

Housing prices in Australia increased 1.7% between 4Q13 and 1Q14, the smallest quarterly advance in a year. Home loans fell 0.9% in March, their first monthly drop since December.

New Zealand food prices rose 0.6% in April and recorded a 1.5% 12-month increase. Turkey’s current account recorded a $3.19 billion deficit in March, similar to February’s shortfall.

The ZEW expectations index for Germany fell 10.1 points to 33.1 in May from 43.2 in April, 46.6 in March 55.7 in February, 61.7 in January, and a recent peak of 62.0 at the end of 2013. The index of German current conditions crested a further 2.6 points to 62.1, but the strong early-2014 momentum is unlikely to be sustained.

The ZEW expectations index for Euroland dropped six points to a nine-month low of 55.2, but the current conditions sub-index improved 4.9 points to negative 25.6.

The British Retail Consortium reported a 4.2% on-year advance in same-store sales, most in three years. This followed a 1.7% 12-month decline in March.

German wholesale prices rose 0.2% on month and fell by a smaller 1.3% on year, the slowest 12-month decline since December. Energy prices also ticked up 0.2% on month.

The French current account deficit widened to EUR 1.5 billion in March from EUR 1.4 billion in February. Italian CPI inflation edged up to 0.6% last month from 0.4% in March. Swedish consumer prices were unchanged on year in April following a 0.6% March-over-March decline. Consumer prices in Hungary dipped 0.1% in the year to April.

Today’s begins a pretty active week for U.S. data releases. After today’s aforementioned offering, highlights will include the PPI, CPI, Philly and New York Fed manufacturing surveys, and industrial production. Japanese and euro area GDP data arrive on Thursday. That day, too, sees public remarks from BOJ Governor Kuroda and Fed Chair Yellen.

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